'How to be green? Many people have asked us this important question. It's really very simple and requires no expert knowledge or complex skills. Here's the answer. Consume less. Share more. Enjoy life.' Penny Kemp and Derek Wall

17 Aug 2010

This was an interesting project, I was approached by the Sustainable Development Commission to write a 'thinkpiece' on a post-capitalist economy, the first draft was returned with the suggestion that it wasn't radical enough, Professor Tim Jackson who is great borrowed the first bit of my title for his book....but not the second.

I think people are mystified by my economics, they may still be after reading this, Karl Marx and Elinor Ostrom taught me so much and what's great is that Marx was well Marx and Elinor in contrast came from the school of Hayek and Buchanan before embracing the commons. Incidentally Marx focussed on power, produced dense philosophy and made stunning use of contradiction (his favourite book as a young man was Tristram Shandy), while Elinor is totally modest and uses quite careful case study work and certainly avoids big claims, although her work shows that there is an alternative to both the market and the state which is a pretty radical point when you think about it.

I should elaborate a bit on what Social Banking actually is. Essentially sites like Zopa in the UK and Prosper in America allow users to borrow and lend money, effectively cutting out the middleman. The central premise is straightforward – there’s a network of lenders and borrowers and, as Zopa concisely put it, the “people who have spare money lend it directly to people who want to borrow. There are no banks in the middle, no huge overheads, and no unethical investments.” It’s a neat idea that’s likely to appeal to the anti-capitalist in all of us. What’s more, a quick comparison of the interest rates indicated on Zopa show that social borrowing can be extremely competitive, especially considering the big lenders wariness in the post credit crunch market (http://articles.taxationweb.co.uk/personal_finances/index.php?id=493)

INTRODUCTION

This paper argues that 1) economic growth is unsustainable ecologically and perhaps economically, even if environmental questions are set aside. In turn, economic growth does not correlate well with rising welfare in mature economies. 2) However, a capitalist economy needs to grow for structural reasons. Alternative economic structures that provide for sustainable increases in welfare, increased social justice and increased participation, are necessary. 3) Social sharing/ commons, a concept described most fully by Benkler, provides a way of raising standards of living, in an economy marked by static or negative growth in GDP. Free and open source software are perhaps the best known examples of social sharing.

ECONOMIC GROWTH?

While there is no formal growth target in the UK, non-inflationary continuous expansion (NICE!) is the goal of economic policy. Indeed most policy is measured in terms of its potential contribution to higher economic growth. Increased economic growth is understood to raise standards of economic well being by most economists and policymakers. However, critics argue that rising economic growth may not be environmentally sustainable. It has proved difficult to achieve rising economic growth without rising levels of CO2, while British CO2 output is falling slightly, this fails to take into account the carbon footprint of goods manufactured abroad but consumed in the UK or of airline emissions. The approach of theorists such as Hawken (1999) et al who advocate a form of ‘Natural Capitalism’ where energy and resource use does not grow with output, has failed to materialise to date.

Other critics, most notably Kenny and Kenny (2006) have marshalled impressive empirical evidence that after relatively low levels of per capita GDP are achieved the correlation between rising welfare and growth is often poor. Some of the studies suggest that rising GDP may correlate with declining levels of mental health and happiness.

However, criticism of economic growth predates mature capitalism. In 1819 the political economist Sismondi observed, ‘I have seen production increasing, whilst enjoyments were diminishing. The mass of the nation here, no less than philosophers, seems to forget that the increase of wealth is not the end in political economy, but its instrument in procuring the happiness of all. I sought for this happiness in every class and I could nowhere find it. […] Has not England, by forgetting men for things, sacrificed the end to the means’. (quoted in Luxemburg 1971: 175-177). Radical environmentalists have argued that economic growth is environmentally unsustainable for several decades, yet growth has continued, without apparent catastrophe. Lomborg (2001) has argued that economic growth correlates strongly with greater efficiency in resource use and that empirical evidence suggests the environment is becoming cleaner with such growth.

Yet from climate change to the threat to commercial fish stocks to the challenge of rubbish disposal, economic growth forever looks unrealistic. While environmental problems predate industrialization, just a few decades of capitalist development in part of the globe, have created obvious strain. If all human beings on the planet consumed at the same level as US citizens, it has been suggested we would need several planet Earths (Wilson 2002). Continued economic growth into to the distant future looks somewhat optimistic on a planetary scale . Putting the case in bleak terms Professor Joel Kovel notes:

If the world were a living organism, then any sensible observer would conclude that this ‘growth’ is a cancer that, if not somehow treated, means the destruction of human society, and even raises the question of the extinction of our species. The details are important and interesting, but less so that the chief conclusion – that irresistible growth, and the evident fact that this growth destabilizes and breaks down the natural ground necessary for human existence, means, in the plainest terms, that we are doomed under the present social order, and that we had better change it as soon as possible (Kovel 2002: 5).

4 comments:

Hi Derek,I thought this could be of interest: http://www.carolmoore.net/articles/leopold-kohr.htmlIf you would be interested a study on the links between biological metaphors (e.g. development) and economic policies, I could send you an article I have been working on. By the way, our interview with you has been finally published in the new issue of Uc Ekoloji. Best wishes,Aysem Mert

Hello DerekGood piece. Particularly interested in the work of Benkler, will certainly have to take a look. Extricating economic(and philosophic) thought from the binary and dogmatic invisible handers and Marxists, I believe, is important. And this takes a step in that direct. Don't get me wrong, the body of thought by and around Marx offers a hell of a lot: i'm very fond of Bellamy Foster's work. But I'm getting fed up with Trotskyist organisations and its tierd economics - i'd border it on the redundant, at times. I'm in the middle of Braudel's fascinating study of capitalism, would recommend that, as well as Mark Fisher's Capitalist Realism - both superb pieces work.

By the way, best of luck for your deputy leadership campaign. If I can help in any way, do let me know.

No Nonsense Guide to Green Politics

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I am a green activist, writer and economist. Three kids, live in Winkfield. Live low impact on the land in my trailer, I am a Green Party local councillor. Ecosocialist and fan of Elinor Ostrom, have worked closely with the Peruvian indigenous leader Hugo Blanco to fight.